About 10,000 Asian refugees in the state of Washington brought a class action suit against the Department of Health and Human Services for abruptly cutting off their cash and medical benefits. They charged that the regulation establishing the revisions was invalid because it became effective only 20 days after it was published, violating the requirement for a 30-day comment period in the Administrative Procedures Act. U.S. District Court Judge Gerhard A. Gesell ordered HHS to delay applying the regulation to the refugees in Washington until May 1 and has scheduled a hearing on the charges for April 28.

Congress established the resettlement program in 1979 after some states protested that the influx of refugees was unfairly taxing their resources. The law allows, but does not require, the government to reimburse states for up to 100 percent of the cost of cash and medical assistance provided to refugees during their first 36 months.

Because of budgetary restraints, HHS wants to concentrate its resources on the first 18 months, after which it believes needy refugees should apply for assistance under regular federal, state and local welfare programs. It argued that continuing the old regulations until May 1 would cost the federal government an additional $15 million and might force funds to be diverted from other programs. Gesell decided that because the only challenge came from refugees in the state of Washington, the new regulations should be delayed only in that state.